SECOND DIVISION
[ G.R. No. 195372, April 10, 2019 ]
PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK
(NOW BANCO DE ORO UNIBANK, INC.), PETITIONER, VS.
WILLIAM GOLANGCO CONSTRUCTION CORPORATION,
RESPONDENT.
[G.R. No. 195375]
WILLIAM GOLANGCO CONSTRUCTION CORPORATION,
PETITIONER, VS. PHILIPPINE COMMERCIAL AND
INTERNATIONAL BANK (NOW BANCO DE ORO UNIBANK,
INC.), RESPONDENT.
DECISION
CAGUIOA, J:
The Petitions
Before the Court are petitions for review on certiorari filed under Rule 45 of the
Rules of Court, entitled "Philippine Commercial and International Bank (now
Banco De Oro Unibank, Inc.) v. William Golangco Construction Corporation"[1]
docketed as G.R. No. 195372 and (ii) "William Golangco Construction
Corporation v. Philippine Commercial and International Bank"[2] docketed as
G.R. No. 195375 (collectively, the Petitions).
The Petitions were consolidated pursuant to the Court's Resolution[3] dated
September 26, 2016, and proceed from the Decision[4] dated December 10,
2009 (assailed Decision) and Resolution[5] dated January 28, 2011 (assailed
Resolution) in CA-G.R. SP. No. 106452 rendered by the Court of Appeals (CA),
First Division and Special Former First Division, respectively.
The Facts
The undisputed facts, as narrated by the CA, are as follows:
[William Golangco Construction Corporation (WGCC)] and x x x
Philippine Commercial International Bank (PCIB) entered into a
contract for the construction of the extension of PCIB Tower II x x x
on October 20, 1989. The project included, among others, the
application of a [granite] wash-out finish on the exterior walls of the
building.
[PCIB] accepted the turnover of the completed work by [WGCC] in a
letter dated June 1, 1992. To answer for any defect arising within a
period of one year, [WGCC] submitted a guarantee bond dated July 1,
1992 issued by Malayan Insurance Company, Inc. in compliance with
the construction contract.
The controversy arose when portions of the [granite] wash-out finish
of the exterior walls of the building began peeling off and falling from
the walls in 1993. [WGCC] made minor repairs after [PCIB]
requested it to rectify the construction defects. In 1994, [PCIB]
entered into another contract with Brains and Brawn Construction and
Development Corporation to re-do the entire [granite] wash-out
finish after [WGCC] manifested that it was "not in a position to do the
new finishing work," though it was willing to share part of the cost.
[PCIB] incurred expenses amounting to [P]11,665,000[.00] for the
repair work.
[PCIB] filed a request for arbitration with the [Construction Industry
Arbitration Commission (CIAC)] for the reimbursement of its
expenses for the repairs made by another contractor. [WGCC], on the
other hand, interposed a counterclaim for [P]5,777,157.84 for
material cost adjustment.
The CIAC, by Decision of June 21, 1996 [CIAC Decision], found
that [PCIB] was entitled to recover from [WGCC] the sum of
[P]9,741,829.00 representing cost of repairs done by another
contractor on the project. It also awarded [WGCC]'s
counterclaim in the amount of [P]5,777,157.84. The CIAC
accordingly disposed as follows:
"After summing up the award to both parties this
TRIBUNAL hereby awards the amount of x x x
[P3,964,671.16] to CLAIMANT [PCIB]. [WGCC] is hereby
ordered to pay the stated amount with legal interest of
x x x 6% x x x from date of this decision until fully
paid."
[WGCC] assailed that portion of the foregoing [CIAC Decision]
that rendered it liable for the construction defects. It went up
to the Supreme Court [in G.R. No. 142830[6]] which held that
it was not liable for the amount claimed by [PCIB]. Said
decision became final on [April 27, 2006].
[PCIB] likewise appealed that part of the [CIAC Decision] that
rendered it liable for the material cost adjustments but the
Supreme Court ruled against [it] [in G.R. No. 127275[7]].
On [January 5, 2007], [WGCC] filed a Motion for Execution of the
[CIAC Decision], as modified by the Supreme Court in G.R. No.
142830. In said motion, [WGCC] prayed for the inclusion of legal
interest of 6% computed from [June 21, 1996].
On [January 22, 2007], the CIAC issued a Writ of Execution for the
principal amount of [P]5,777,157.84 [(principal award)] but without
mention of the legal interest sought by [WGCC].
[WGCC] filed a Motion to Amend 22 January 2007 Writ of
to include legal interest of 6% per annum computed from
1996] on the principal [award] of [P]5,777,157.84, and to
any reference to "PCIB" or "CLAIMANT" in the writ of
includes Equitable-PCI Bank or its successor/s-in-interest.
Execution
[June 21,
state that
execution
On [April 3, 2007], [PCIB] opposed [WGCC]'s motion to include legal
interest of 6% per annum, on the principal [award] of
[P]5,777,157.84, in relation to which, [WGCC] filed its reply.
In its Order dated [May 25, 2007], the CIAC granted [WGCCJ's
motion to amend the writ of execution, thus:
"ACCORDINGLY, the Motion to Amend [January 22, 2007]
Writ of Execution is hereby granted. The said writ of
execution shall be amended as follows:
(1)To state that any reference to "PCIB" or
"CLAIMANT" in the writ of execution includes or
refers to Equitable- PCI Bank or its successor/sin-interest.
(2)The inclusion of legal interest of x x x 6% on
the principal [award] awarded to [PCIB] of x x x
[P5,777,157.84] computed from [June 21,
1996] and until such time as the same had
been fully paid, as part of the amount to be
executed in the instant case.
SO ORDERED." x x x
[PCIB] moved for reconsideration. It argued that its liability
for interest [on the principal award] should commence only on
[April 27, 2006], the date on which the Supreme Court's
Decision that granted [WGCC]'s appeal became final, and not
on [June 21, 1996, when the CIAC Decision was issued].
After [WGCC] opposed [PCIB]'s motion for reconsideration, the CIAC
amended the third paragraph of its [May 25, 2007 Order] in this
wise:
"(2) The inclusion of legal interest of x x x 12% on
the principal [award] awarded to [PCIB] of x x x
[P5,777,157.84] computed from [April 27, 2006] and
until such time as the same had been fully paid, as
part of the amount to be executed in the instant case." x
xx
On [November 29, 2007], [WGCC] filed a Motion for Clarification
and/or Partial Reconsideration to which [PCIB] made a
Comment/Opposition.
In its [July 25, 2008] Order, the CIAC sustained its earlier
ruling that the computation of the interest should be reckoned
from the time the decision of the Supreme Court in G.R. No.
142830 became final on [April 27, 2006] and not on [June 21,
1996]. It, however, reduced the interest rate from 12% to 6%
per annum. x x x[8] (Additional emphasis and underscoring
supplied)
On August 15, 2008, William Golangco Construction Corporation (WGCC) filed a
Motion for Reconsideration of CIAC's July 25, 2008 Order, which Philippine
Commercial International Bank (PCIB) again opposed.[9] This motion was denied
by the CIAC in its October 28, 2008 Order,[10] which reads:
xxxx
This Tribunal took note of the decision of the Supreme Court [in G.R.
No. 142830], reversing the earlier pronouncements of the [CA] and
of this Arbitral Tribunal relative to this case.
The only pending issue which this Tribunal seeks to resolve is the
award of legal interests in favor of [WGCC] after having obtained a
favorable judgment from the Supreme Court to serve as restitution or
reparation of damages, as equity and justice may warrant given the
circumstances. x x x
After careful study of the circumstances presented, the
Tribunal further clarifies that [WGCC] is not entitled to legal
interest from June 21, 1996 to [April 26, 2006] at the rate of
[6%] per annum as an award of damages x x x. [PCIB] is not
at fault nor has incurred delay, either by negligence or
intention in the payment of judgment award, since it was
[WGCC] who sought for the reversal of the decision by way of
an appeal.
Further, the amount finally adjudged by the Supreme Court could not
have been paid earlier than the date when it rendered the decision
[in G.R. No. 142830], thus this Tribunal reiterates that the legal
interest shall only accrue starting [April 26, 2006]. x x x [I]t is only
then that [PCIB] can be held liable for the payment of legal interests
at the rate of [12%] per annum when the [CIAC Decision] had
become final and executory until such time that it has been fully paid.
[11] (Emphasis and italics supplied)
Aggrieved, WGCC filed its petition for review before the CA (WGCC's CA
Petition).[12] Citing Eastern Shipping Lines v. Court of Appeals[13] (Eastern
Shipping), WGCC argued that it is entitled to 6% interest per annum on the
principal award from the date the CIAC Decision was issued on June 21, 1996
until April 26, 2006, in addition to the legal interest of 12% applicable to the
entire award (i.e., the sum of the principal award and 6% interest payable),
reckoned from the finality of the Court's Decision in G.R. No. 142830 on April 27,
2006, until full payment.[14]
Opposing WGCC's CA Petition, PCIB averred that the 6% interest set forth in
Eastern Shipping applies only when there is a breach of an obligation not
constituting a loan or forbearance of money. PCIB stresses that the imposition of
such interest lies within the discretion of the court. Thus, it must be explicitly
imposed in the final decision sought to be enforced. In this connection, PCIB
claims that neither the CIAC Decision nor the Court's Decision in G.R. No.
142830 imposed such interest.[15]
Meanwhile, WGCC filed a Manifestation and Motion before the CIAC on January
23, 2009 praying for the execution of the CIAC Decision. Granting said motion,
the CIAC issued an Order on February 9, 2009 (February 2009 CIAC Writ)
directing the issuance of a writ of execution for the enforcement of: (i) the
principal award of P5,777,157.84; and (ii) 12% interest per annum on the
principal award computed from April 27, 2006 until full payment, without
prejudice to the outcome of WGCC's CA Petition.[16]
Subsequently, WGCC filed a Manifestation before the CA stating that on March
10, 2009, Banco De Oro Unibank, Inc. (BDO), as successor of PCIB,
issued two (2) checks in its favor in the amount of P5,777,157.84 and
P1,965,816.45 (BDO Checks) as full and final satisfaction of the
principal award and legal interest due thereon, in accordance with the
February 2009 CIAC Writ.[17]
Thereafter, on December 10, 2009, the CA issued the assailed Decision, the
dispositive portion of which reads:
WHEREFORE, in the light of the foregoing, [WGCC's CA Petition] is
PARTLY GRANTED. The writ of execution shall include legal interest
of x x x 6% on the principal [award] awarded to [WGCC] and to
be computed from [June 21, 1996] until it is fully paid as so provided
in the very same final and executory judgment x x x.
IT IS SO ORDERED.[18] (Emphasis supplied)
PCIB filed a Motion for Reconsideration assailing the award of 6% interest on the
principal award.[19]
On the other hand, WGCC filed a Motion for Clarification and/or Partial
Reconsideration, requesting for an amendment of the assailed Decision to
explicitly state that the entire award should itself earn interest at the rate of
12% per annum, from April 27, 2006, until its full satisfaction.[20]
The CA denied both motions on January 28, 2011 via the assailed Resolution.[21]
Hence, these Petitions.
The Issue
The Petitions call on the Court to determine whether the CA erred in:
(i) Directing PCIB to pay interest on the principal award at the rate of
6% per annum, reckoned from June 21,1996, or the date of the
issuance of the CIAC Decision, until full payment; and
(ii) Denying WGCC's prayer to treat the entire judgment award as a
forbearance of money that is subject to interest at the rate of 12%
per annum, reckoned from the finality of the Court's Decision in
G.R. No. 142830 on April 27, 2006, or, until full payment.
The Court's Ruling
The Court affirms the assailed Decision and Resolution.
Monetary and Compensatory Interest
The crux of the controversy hinges on two different concepts of interest —
monetary and compensatory. The Civil Code provisions governing these concepts
read as follows:
ART. 1956. No interest shall be due unless it has been expressly
stipulated in writing.
xxxx
ART. 2209. If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the
payment of the interest agreed upon, and in the absence of
stipulation, the legal interest, which is [6%] per annum.
ART. 2210. Interest may, in the discretion of the court, be allowed
upon damages awarded for breach of contract.
ART. 2211. In crimes and quasi-delicts, interest as a part of the
damages may, in a proper case, be adjudicated in the discretion of
the court.
ART. 2212. Interest due shall earn legal interest from the time it is
judicially demanded, although the obligation may be silent upon this
point.
ART. 2213. Interest cannot be recovered upon unliquidated claims or
damages, except when the demand can be established with
reasonable certainty. (Emphasis supplied)
Monetary interest under Article 1956 serves as compensation fixed by the parties
for the use or forbearance of money.[22] As can be gleaned from the foregoing
provision, payment of monetary interest is allowed only if: (i) there was an
express stipulation for the payment of interest; and (ii) the agreement for the
payment of interest was reduced in writing. The concurrence of the two
conditions is required for the payment of monetary interest.[23]
On the other hand, compensatory interest (i.e., interest awarded as damages
under Articles 2209 to 2213 of the Civil Code) is that which is "allowed in actions
for breach of contract or tort for the unlawful detention of money already
due."[24] As the governing provisions indicate, compensatory interest may be
imposed by law or by the courts as penalty or indemnity for damages.[25]
In Eastern Shipping, the Court set forth the guidelines on the computation of
compensatory interest in accordance with the provisions of the Civil Code, thus:
x x x With regard particularly to an award of interest in the concept
of actual and compensatory damages, the rate of interest, as well as
the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of
a sum of money, i.e., a loan or forbearance of money, the interest
due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the
provisions of Article 1169[26] of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of
money, is breached, an interest on the amount of damages awarded
may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest
shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date of the
judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation of
legal interest shall, in any case, be on the amount of finally adjudged.
3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the
case falls under paragraph 1 or paragraph 2, above, shall be 12% per
annum from such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of
credit.[27] (Emphasis supplied)
Subsequently, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB) issued
Circular No. 799, series of 2013 reducing the rate of interest applicable on loan
or forbearance of money from 12% to 6% per annum. The reduced rate became
effective on July 1, 2013.[28] In Nacar v. Gallery Frames,[29] the Court clarified
that the reduced interest rate of 6% per annum can only be applied
prospectively. Thus, the rate of 12% per annum shall be made to apply until
June 30, 2013.[30]
WGCC is entitled to compensatory interest reckoned from the issuance of the
CIAC Decision.
As earlier stated, the principal award represents the material cost adjustment
incurred by WGCC which PCIB failed to pay. The award proceeds from PCIB's
breach of its construction contract with WGCC — a contract which does not
constitute a loan or forbearance of money. Accordingly, the interest disputed
herein constitutes compensatory interest awarded pursuant to Article 2210 of
the Civil Code, thereby falling under paragraph 2 of the guidelines set forth in
Eastern Shipping.
PCIB insists that it cannot be held liable to pay compensatory interest, since the
CIAC Decision directing payment of the principal award in WGCC's favor was
silent in this respect. According to PCIB, the imposition of such interest at this
stage in the proceedings would run counter to the rule on immutability of
judgments.
PCIB's assertions lack merit.
To recall, the CIAC initially found: (i) WGCC liable to pay PCIB for construction
deficiencies amounting to P9,741,829.00; and (ii) PCIB liable to pay material
cost adjustment amounting to P5,777,157.84. These amounts resulted in a net
award in favor of PCIB, in the amount of P3,964,671.16. The CIAC Decision
explicitly imposed compensatory interest upon such net award, at the rate of 6%
per annum.
The relevant portion of the CIAC Decision states:
VII. SUMMARY OF AWARD
The TRIBUNAL on the basis of the above decision hereby make the
awards as follows:
A. CLAIMANT:
ITEMS
Payment to another
contractor to do the
repairs
Payment for
damaged properties
and injuries to
persons
TOTAL
CLAIM
AWARD
P11,665,000.00
P9,741,829.00
3,000,000.00
0.00
P14,665,000.00
P9,741,829.00
B. RESPONDENT:
ITEMS
CLAIM
AWARD
Material cost
adjustment
Interest
Attorney's fees
TOTAL
P5,777,157.84
P5,777,157.84
Not specified
0.00
300,000.00
P6,077,157.84
0.00
P5,777,157.84
NET A WARD TO
CLAIMANT
P3,964,671.16
VIII. DISPOSITIVE ACTION
After summing up the award to both parties this TRIBUNAL hereby
awards the amount of THREE MILLION NINE HUNDRED SIXTY-FOUR
THOUSAND SIX HUNDRED SEVENTY ONE PESOS AND SIXTEEN
CENTAVOS (P3,964,671.16) to [PCIB]. [WGCC] is hereby ordered to
pay the stated amount with legal interest of six (6%) percent from
date of this decision until fully paid.[31]
However, in view of the Court's Decision in G.R. No. 142830 completely
absolving WGCC from liability, the only award which now remains is the material
cost adjustment adjudged in favor of WGCC. Such principal award in the
amount of P5,777,157.84 evidently remains subject to compensatory
interest which CIAC imposed on the net award initially adjudged in favor
of PCIB, but later deleted by the Court with finality.
As correctly observed by the CA:
In the [CIAC Decision], finding that under the parties' contract,
increase for labor and materials under certain conditions was allowed
but that [PCIB] presented no strong, or at best, token opposition to
the evidence presented by [WGCC] for the escalated cost of
materials, the CIAC awarded [WGCC]'s counterclaim in the amount of
[P]5,777,157.84. Under the contract, [PCIB] is liable for materials
cost adjustment but it failed to pay the same and that therefore,
[WGCC] is entitled to an award of interest because of the former's
breach. The CIAC, however, did not [explicitly] award interest
to [WGCC], not because the latter is not entitled thereto but
because [WGCC] had also liabilities with [PCIB] upon which
the CIAC did not also impose interest. Yet, in the dispositive
portion of the [CIAC Decision], the CIAC awarded "legal
interest of [6%] from the date of this decision until fully paid"
on the net liability ([P]3,964,671.16) of [WGCC] after its
counterclaim ([P]5,777,157.84) was offset against its liability
([P]9,741,829.00) with [PCIB]. Since the [Decision of the
Court in G.R. No. 142830] merely reversed that portion of the
[CIAC Decision] that made [WGCC] liable for construction
deficiencies, the award of 6% interest stands, which may
[now] be applied to the amount awarded to [WGCC]. x x x[32]
(Emphasis and underscoring supplied)
The CA was likewise correct when it reckoned the imposition of compensatory
interest from the issuance of the CIAC Decision on June 21, 1996.
To recall, compensatory interest shall begin to run either:
1. From the date of judicial or extrajudicial demand (where the claim is
liquidated or can otherwise be established with reasonable certainty);[33]
or
2. From "the date the judgment of the court [or quasi-judicial body] is
made (at which time the quantification of damages may be deemed
to have been reasonably ascertained)."[34]
The reckoning point for compensatory interest, when imposed on unliquidated
claims, is set on the date of the judgment of the court or quasi-judicial body
granting the award since it is only at such time when the amount claimed
becomes "liquidated," that is, determined with reasonable certainty.
In this case, WGCC's claim became "liquidated" on June 21, 1996, the day the
CIAC Decision awarding its counterclaim amounting to P5,777,157.84 was
issued. Hence, WGCC is entitled to compensatory interest at the rate of 12%
from June 21, 1996 to June 30, 2013, and 6% interest from July 1, 2013 until
finality of this Decision.
WGCC is entitled to interest imposed on the entire award.
In addition to the compensatory interest awarded in its favor, WGCC claims that
pursuant to the Court's ruling in Eastern Shipping, it is also entitled to "interest
on interest" at the rate of 12% per annum, reckoned from April 27, 2006 until
full payment.
This is error.
To recall, paragraph 3 of the guidelines set forth in Eastern Shipping stems from
Article 2212 of the Civil Code which, in turn, provides that "[i]nterest due shall
earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point."
In Hun Hyung Park v. Eung Wong Choi,[35] the Court clarified that the "interest
on interest" referred to by Article 2212 only covers accrued interest.
x x x Article 2212 of the Civil Code x x x does not apply because
"interest due" in Article 2212 refers only to accrued interest. A look at
the counterpart provision of Article 2212 of the new Civil Code,
Article 1109 of the old Civil Code, supports this. It provides:
Art. 1109. Accrued interest shall draw interest at the
legal rate from the time the suit is filed for its recovery,
even if the obligation should have been silent on this
point.
In commercial transactions the provisions of the Code of
Commerce shall govern.
Pawnshops and savings banks shall be governed by their
special regulations. (Emphasis and underscoring supplied)
[36]
Nevertheless, the Court finds that while WGCC is not entitled to "interest on
interest," it is, consistent with the Court's ruling in Eastern Shipping, entitled to
interest at the rate of 6% per annum applied to the entire award computed from
the finality of this Decision until full satisfaction, said entire award now being
deemed to be a forbearance of credit during the interim period.
The records of the case show that as early as March 10, 2009, BDO (for and on
behalf of PCIB) issued and delivered two checks to WGCC in the following
amounts:[37]
Check No.
00059321
00059322
Total
Amount
P1,965,816.45
P5,777,157.84
P7,742,974.29
These checks were issued and delivered to WGCC pursuant to the February 2009
CIAC Writ directing the immediate enforcement of the CIAC Decision, subject to
the outcome of WGCC's CA Petition. To recall, the February 2009 CIAC Writ
reads, in part:
This Tribunal finds that there is no legal obstacle to the immediate
enforcement of payment of the following undisputed amounts in favor
of WGCC[:]
a. the principal award of P5,777,157.84[;] and
b. the award of 12% interest [per annum] on the principal award
of P5,777,157.84 computed from [April 27, 2006] until such
time as the judgment award is fully paid.[38] (Emphasis
supplied)
Thus, PCIB's remaining liability is equal to the sum of the following amounts (i)
principal award; and (ii) compensatory interest applied to the principal award
reckoned from the issuance of the CIAC Decision until finality of the judgment
award, minus P7,742,974.29:
In turn, the sum of (i) and (ii) above less P7,742,974.29 shall earn interest at
the rate of 6% per annum from the date of this Decision until full payment.
WHEREFORE, the Court GRANTS the Petition docketed as G.R. No. 195372,
and DENIES the Petition docketed as G.R. No. 195375. Thus:
1. The Decision and Resolution respectively dated December 10, 2009 and
January 28, 2011 issued by the Court of Appeals, First Division and Special
Former First Division, respectively, in CA-G.R. SP. No. 106452 are
AFFIRMED.
2. The Construction Industry Arbitration Commission is hereby DIRECTED to
compute the remaining liability of Philippine Commercial and International
Bank (now Banco de Oro Unibank, Inc.) in accordance with this Decision
and effect payment thereof in favor of William Golangco Construction
Corporation within thirty (30) days from receipt of the records of this case.
SO ORDERED.
Carpio, (Chairpeson), and Lazaro-Javier, JJ., concur.
Perlas-Bernabe, J., on leave.
Jardeleza,* J., on wellness leave.
* Designated additional Member per Raffle dated January 21, 2019; on wellness
leave.
[1] Rollo (G.R. No. 195372), pp. 9-35, excluding Annexes.
[2] Rollo (G.R. No. 195375), pp. 3-33, excluding Annexes.
[3] Rollo (G.R. No. 195372), p. 370.
[4] Id. at 40-50; rollo (G.R. No. 195375), pp. 35-45. Penned by Associate Justice
Apolinario D. Bruselas, Jr., with Presiding Justice Conrado M. Vasquez, Jr. and
Associate Justice Jose C. Reyes, Jr. (now a Member of this Court) concurring.
[5] Id. at 52-53; id. at 48-49. Penned by Associate Justice Apolinario D.
Bruselas, Jr., with Associate Justices Jose C. Reyes, Jr. (now a Member of this
Court) and Isaias P. Dicdican concurring.
[6]
William Golangco Construction Corporation
International Bank, 520 Phil. 167 (2006).
v.
Philippine
Commercial
[7] Philippine Commercial International Bank v. Court of Appeals, 452 Phil. 542
(2003).
[8] Rollo (G.R. No. 195372), pp. 40-44; rollo (G.R. No. 195375), pp. 35-39.
[9] Id. at 16-17; id. at 13-14.
[10] Id. at 199-200; id. at 97-98.
[11] Id. at 199; id. at 97.
[12] See id. at 45; id. at 40.
[13] 304 Phil. 236(1994).
[14] Rollo (G.R. No. 195372), p. 45; rollo (G.R. No. 195375), p. 40.
[15] See id. at 45-46; id. at 40-41.
[16] As quoted in WGCC's Manifestation, see rollo (G.R. No. 195372), p. 231.
[17] Rollo (G.R. No. 195372), pp. 19, 232.
[18] Id. at 50; rollo (G.R. No. 195375), p. 45.
[19] Id. at 52; id. at 48.
[20] Id. at 52-53; id. at 48-49.
[21] Id.; id.
[22] Siga-an v. Villanueva, 596 Phil. 760, 769 (2009).
[23] Id. at 769.
[24] Mendoza v. Spouses Gomez, 736 Phil. 460, 485 (2014).
[25] Siga-an v. Villanueva, supra note 22, at 769.
[26] ART. 1169. Those obliged to deliver or to do something incur in delay from
the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay
may exist:
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it appears that
the designation of the time when the thing is to be delivered or the service is to
be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond
his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfills his obligation, delay by the
other begins.
[27] Eastern Shipping, supra note 13, at 252-254.
[28] Nacar v. Gallery Frames, 716 Phil. 267, 279-281 (2013).
[29] Id.
[30] Id. at 281.
[31] Rollo (G.R. No. 195372), pp. 122-123; rollo (G.R. No. 195375), pp. 109-
110.
[32] Id. at 47-48; id. at 42-43.
[33] See Eastern Shipping, supra note 13, at 254.
[34] See CIVIL CODE, Art. 2213. See also UPSI Property Holdings, Inc. v. Diesel
Construction Co., Inc., 740 Phil. 655, 669 (2014), citing Nacar v. Gallery
Frames, supra note 28, at 282.
[35] G.R. No. 220826, March 27, 2019.
[36] Id. at 16-17.
[37] See rollo (G.R. No. 195372), p. 232.
[38] As quoted in WGCC's Manifestation, see id. at 231.
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